FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-5907
1st SOURCE CORPORATION
(Exact name of registrant as specified in its charter)
INDIANA 35-1068133
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 North Michigan Street South Bend, Indiana 46601
(Address of principal executive offices) (Zip Code)
(219) 235-2702
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
Number of shares of common stock outstanding as of March 31, 1999 -
18,949,507 shares.
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Page
Consolidated statements of financial condition -- 3
March 31, 1999, and December 31, 1998
Consolidated statements of income -- 4
three months ended March 31, 1999 and 1998
Consolidated statements of cash flows -- 5
three months ended March 31, 1999 and 1998
Notes to the Consolidated Financial Statements 6
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
1st Source Corporation and Subsidiaries
(Dollars in thousands)
March 31, December 31,
1999 1998
<S> <C> <C>
ASSETS
Cash and due from banks $ 102,401 $ 132,514
Federal funds sold and
interest bearing deposits with other banks 2,935 41,951
Investment securities:
Securities available-for-sale, at fair value
(amortized cost of $415,181 and $440,147
at March 31, 1999 and December 31, 1998) 416,468 443,691
Securities held-to-maturity, at amortized cost
(fair value of $93,939 and $99,734 at
March 31, 1999 and December 31, 1998) 91,519 96,008
Total Investment Securities 507,987 539,699
Loans - net of unearned discount 1,915,952 1,881,696
Reserve for loan losses (42,080) (40,929)
Net Loans 1,873,872 1,840,767
Operating leases, net of accumulated depreciation 57,717 54,170
Premises and equipment, net of
accumulated depreciation 31,373 31,227
Other assets 94,034 91,693
Total Assets $ 2,670,319 $2,732,021
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest bearing $ 282,621 $ 294,810
Interest bearing 1,810,029 1,882,297
Total Deposits 2,092,650 2,177,107
Federal funds purchased and securities
sold under agreements to repurchase 217,846 159,478
Other short-term borrowings 37,641 82,681
Other liabilities 41,880 38,957
Long-term debt 13,107 13,189
Total Liabilities 2,403,124 2,471,412
Guaranteed preferred beneficial interests
in the Company's subordinated debentures 44,750 44,750
Shareholders' equity:
Common stock-no par value 6,883 6,270
Capital surplus 179,905 121,456
Retained earnings 45,000 97,863
Less cost of common stock in treasury (11,609) (12,723)
Net unrealized appreciation of
securities available-for-sale 2,266 2,993
Total Shareholders' Equity 222,445 215,859
Total Liabilities and Shareholders' Equity $ 2,670,319 $2,732,021
The accompanying notes are a part of the consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
1st Source Corporation and Subsidiaries
(Dollars in thousands, except per share amounts)
Three Months Ended March 31
1999 1998
<S> <C> <C>
Interest Income:
Loans, including fees $ 40,986 $ 41,772
Investment securities:
Taxable 4,917 4,046
Tax-exempt 1,912 1,997
Other 83 77
Total Interest Income 47,898 47,892
Interest Expense:
Deposits 20,674 19,984
Short-term borrowings 3,418 4,432
Long-term debt 227 232
Total Interest Expense 24,319 24,648
Net Interest Income 23,579 23,244
Provision for Loan Losses 1,293 2,401
Net Interest Income After
Provision for Loan Losses 22,286 20,843
Noninterest Income:
Trust fees 2,266 2,066
Service charges on deposit accounts 1,540 1,406
Loan servicing and sale income 4,543 2,520
Equipment rental income 3,413 2,347
Other income 2,526 2,445
Investment securities and other investment (losses) (102) (122)
Total Noninterest Income 14,186 10,662
Noninterest Expense:
Salaries and employee benefits 12,972 11,687
Net occupancy expense 1,258 1,218
Furniture and equipment expense 2,011 1,642
Depreciation - leased equipment 2,980 1,820
Business development and marketing expense 731 587
Other expense 3,648 2,900
Total Noninterest Expense 23,600 19,854
Income Before Income Taxes and
Subsidiary Trust Distributions 12,872 11,651
Income taxes 4,438 3,926
Distribution on preferred securities of
subsidiary trusts, net of income tax benefit 554 565
Net Income $ 7,880 $ 7,160
Other Comprehensive Income, Net of Tax:
Change in unrealized appreciation (depreciation)
available-for-sale securities (727) 395
Total Comprehensive Income $ 7,153 $ 7,555
Per Common Share: <F1>
Basic Net Income Per Common Share $ 0.42 $ 0.38
Diluted Net Income Per Common Share $ 0.41 $ 0.36
Dividends $ 0.073 $ 0.066
Basic Weighted Average Common Shares Outstanding 18,913,234 19,080,036
Diluted Weighted Average Common Shares Outstanding 19,241,047 19,482,288
<FN>
<F1> The computation of per share data gives retroactive recognition to a
10% stock dividend declared on January 24, 1999.
</FN>
The accompanying notes are a part of the consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
1st Source Corporation and Subsidiaries
(Dollars in thousands)
Three Months Ended March 31
1999 1998
<S> <C> <C>
Operating Activities:
Net income $ 7,880 $ 7,160
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 1,293 2,401
Depreciation of premises and equipment 3,944 2,730
Amortization of investment security premiums
and accretion of discounts, net 452 219
Deferred income taxes (1,520) 269
Realized investment securities losses 77 122
Realized (gains) on securitized loans (31) (8)
Increase in interest receivable (636) (909)
Increase in interest payable 1,275 2,171
Other 6,532 1,239
Net Cash Provided by Operating Activities 19,266 15,394
Investing Activities:
Proceeds from sales and maturities
of investment securities 92,520 38,516
Purchases of investment securities (62,593) (48,299)
Net decrease in short-term investments 39,016 10,885
Loans sold or participated to others 80,693 33,679
Net increase in loans made to customers
and principal collections on loans (115,055) (141,500)
Net increase in leased assets (2,309) (4,776)
Purchases of premises and equipment (905) (604)
Increase in servicing assets (2,841) (2,417)
Other (3,185) (2,116)
Net Cash Used in Investing Activities 25,341 (116,632)
Financing Activities:
Net decrease in demand deposits, NOW
accounts and savings accounts (134,118) (20,016)
Net increase in certificates of deposit 49,661 59,812
Net increase in short-term borrowings 13,328 49,780
Payments on long-term debt (82) (3,997)
Acquisition of treasury stock (2,115) (340)
Cash dividends (1,394) (1,262)
Other -- 12
Net Cash Provided by Financing Activities (74,720) 83,989
Decrease in Cash and Cash Equivalents (30,113) (17,249)
Cash and Cash Equivalents, Beginning of Year 132,514 90,864
Cash and Cash Equivalents, End of Period $ 102,401 $ 73,615
The accompanying notes are a part of the consolidated financial statements.
</TABLE>
Notes to the Consolidated Financial Statements
1. The unaudited consolidated condensed financial statements have been
prepared in accordance with the instructions for Form 10-Q and
therefore do not include all information and footnotes necessary
for a fair presentation of financial position, results of
operations and cash flows in conformity with generally accepted
accounting principles. The information furnished herein reflects
all adjustments (all of which are normal and recurring in nature)
which are, in the opinion of management, necessary for a fair
presentation of the results for the interim periods for which this
report is submitted. The 1998 1st Source Corporation Annual Report
on Form 10-K should be read in conjunction with these statements.
2. In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 is effective for
all fiscal quarters of all fiscal years beginning after June 15, 1999
(January 1, 2000 for 1st Source). SFAS No. 133 requires that all
derivative instruments be recorded on the balance sheet at their fair
value. Changes in the fair value of derivatives are recorded each
period in current earnings or other comprehensive income, depending on
the intended use of the derivative and its resulting designation.
1st Source anticipates that due to its limited use of derivative
instruments, the adoption of SFAS No. 133 will not have a significant
effect on 1st Source's results of operations or its financial position.
PART I.
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
This discussion and analysis should be read in conjunction with the
Company's consolidated condensed financial statements and the financial
and statistical data appearing elsewhere in this report and the 1998
1st Source Corporation Annual Report on Form 10-K.
Except for historical information contained herein, the matters discussed
in this document, and other information contained in the Company's SEC
filings, may express "forward-looking statements." Those "forward-looking
statements" may involve risk and uncertainties, including statements
concerning future events or performance and assumptions and other
statements concerning future events or performance and assumptions and other
statements that are other than statements of historical facts. The Company
wishes to caution readers not to place undue reliance on any forward-looking
statements, which speak only as of the date made. Readers are advised that
various factors--including, but not limited to, changes in laws, regulations
or generally accepted accounting principles; the Company's competitive
position within the markets served; increasing consolidation within the
banking industry; certain customers and vendors of critical systems or
services failing to comply with Year 2000 programming issues; unforeseen
changes in interest rates; any unforeseen downturns in the local, regional
or national economies--could cause the Company's actual results or
circumstances for future periods to differ materially from those anticipated
or projected.
1st Source does not undertake, and specifically disclaims any obligation,
to publicly release the result of any revisions that may be made to any
forward-looking statements to reflect the occurrence of unanticipated events
or circumstances after the date of such statements.
COMPARISON OF THREE-MONTH PERIODS
ENDED MARCH 31, 1999 AND 1998
Net income for the three-month period ended March 31, 1999, was
$7,880,000 compared to $7,160,000 for the equivalent period in 1998. The
primary reasons for the increase were an increase in net interest income,
a strong increase in noninterest income and a decrease in the provision
for loan losses. This was offset by an increase in noninterest expense.
Diluted net income per common share increased to $0.41 for the three-
month period ended March 31, 1999, from $.36 in 1998. Return on average
common shareholders' equity was 14.59% for the three months ended March
31, 1999, compared to 14.64% in 1998. The return on total average assets
was 1.21% for the three months ended March 31, 1999, compared to 1.19% in
1998.
NET INTEREST INCOME
The taxable equivalent net interest income for the three-month period
ended March 31, 1999, was $24,482,000, an increase of 1.36% over the same
period in 1998, resulting in a net yield of 4.14% compared to 4.33% in
1998.
Total average earning assets increased 5.95% for the three-month
period ended March 31, 1999, compared to the period ended March 31, 1998.
Total average investment securities increased by 20.06% from one year ago
primarily due to an increase of investments in U.S. Government Securities.
An increase in average loans of 2.63%, compared to March 31, 1998, was
achieved despite loan securitizations of $346 million of auto fleet and
aircraft loans during 1998. The taxable equivalent yields on total average
earning assets were 8.26% and 8.75% for the periods ended March 31, 1999, and
1998 respectively.
Average deposits increased 10.90% from the first quarter of 1998 to the
first quarter of 1999. The cost rate on average interest-bearing funds
was 4.77% for the three-months ended March 31, 1999, compared to 5.17% for
the three months ended March 31, 1998. The majority of the growth in
deposits from last year has occurred in NOW accounts.
The following table sets forth consolidated information regarding
average balances and rates.
<TABLE>
<CAPTION>
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY
INTEREST RATES AND INTEREST DIFFERENTIAL
(Dollars in thousands)
Three Months Ended March 31
1999 1998
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment securities:
Taxable $ 348,643 $ 4,917 5.72% $ 271,221 $ 4,046 6.05%
Tax exempt <F1> 155,688 2,767 7.21% 148,832 2,855 7.78%
Net loans <F2><F3> 1,885,317 41,034 8.83% 1,837,020 41,823 9.23%
Other investments 7,614 83 4.42% 5,462 77 5.72%
Total Earning Assets 2,397,262 48,801 8.26% 2,262,535 48,801 8.75%
Cash and due from banks 105,259 78,492
Reserve for loan losses (41,202) (36,113)
Other assets 176,920 143,107
Total $2,638,239 $2,448,021
LIABILITIES AND SHAREHOLDERS' EQUITY:
Interest bearing deposits $1,796,227 $20,674 4.67% $1,628,832 $19,984 4.98%
Short-term borrowings 256,405 3,418 5.41% 292,933 4,432 6.14%
Long-term debt 13,154 227 7.00% 13,310 232 7.06%
Total Interest Bearing
Liabilities 2,065,786 24,319 4.77% 1,935,075 24,648 5.17%
Noninterest bearing deposits 268,527 233,018
Other liabilities 84,951 81,547
Shareholders' equity 218,975 198,381
Total $2,638,239 $2,448,021
Net Interest Income $24,482 $24,153
Net Yield on Earning Assets on a Taxable
Equivalent Basis 4.14% 4.33%
<FN>
<F1> Interest income includes the effects of taxable equivalent
adjustments, using a 40.525% rate for 1999 and 1998. Tax equivalent
adjustments were $855 in 1999 and $858 in 1998.
<F2> Loan income includes fees of $1,409 in 1999 and $1,094 in 1998. Loan
income also includes the effects of taxable equivalent adjustments,
using a 40.525% rate for 1999 and 1998. The tax equivalent
adjustments were $48 in 1999 and $51 in 1998.
<F3> For purposes of this computation, non-accruing loans are included in
the daily average loan amounts outstanding.
</FN>
</TABLE>
PROVISION FOR LOAN LOSSES
The provision for loan losses for the three-month periods ended March
31, 1999, and 1998, was $1,293,000 and $2,401,000, respectively. Year-to-date
Net Charge-Offs of $142,000 have been recorded in 1999, compared
to $151,000 of Net Charge-offs for the same period in 1998. The reserve
for loan losses was $42,080,000 or 2.20% of net loans at March 31, 1999,
compared to $40,929,000 or 2.18% of net loans at December 31, 1998.
Non-performing assets at March 31, 1999, were $11,426,000 compared to
$10,571,000 at December 31, 1998, an increase of 8.09%. At March 31, 1999,
non-performing assets were .60% of net loans compared to .56% at December
31, 1998. It is management's opinion that the reserve for loan losses is
adequate to absorb anticipated losses in the loan portfolio as of
March 31, 1999.
NONINTEREST INCOME
Noninterest income for the three-month periods ended March 31, 1999,
and 1998 was $14,186,000 and $10,662,000, respectively, an increase of 33.05%.
Trust fees increased 9.68%, service charges on deposit accounts increased
9.53%, loan servicing and sale income increased 80.28%, equipment rental
income increased 45.42% and other income increased 3.31%. The increase in
loan servicing and sale income is due to increased loan securitization
activity and income recognition required by SFAS No. 125. The increase in
equipment rental income was primarily due to growth in operating leases.
Investment Security and other net losses for the three-month period ended
March 31, 1999, were $102,000 compared to net losses of $122,000 in 1998.
The net losses for both years were primarily attributed to certain
partnership and venture capital investments.
NONINTEREST EXPENSE
Noninterest expense for the three-month period ended March 31, 1999,
was $23,600,000, an increase of 18.86% over the same period in 1998. For
the three-month period ended March 31, 1999, salaries and employee
benefits increased 11.0%, net occupancy expense increased 3.28%, furniture
and equipment expense increased 22.47%, depreciation on leased equipment
increased 63.74%, business development and marketing expense increased
24.53%, and miscellaneous other expenses increased 25.79% over the same
period in 1998. The primary increase in salaries and employee benefits
is attributed to an increase in commissions and referrals and a 10% increase
in our employee base compared to 1998. The increase in furniture and
equipment expense is primarily due to software and computer charges,
equipment rental and repair expenses. The increase in depreciation of
leased equipment is due to a significant volume increase from the prior year.
The miscellaneous other expense increase from one year ago is attributed
primarily to Year 2000 consulting expenses.
INCOME TAXES
The provision for income taxes for the three-month period ended March
31, 1999, was $4,438,000 compared to $3,926,000 for the comparable period
in 1998. The provision for income taxes for the three months ended
March 31, 1999, and 1998, is at a rate which management believes
approximates the effective rate for the year.
CAPITAL RESOURCES
The banking regulators have established guidelines for leverage
capital requirements, expressed in terms of Tier 1 or core capital as a
percentage of average assets, to measure the soundness of a financial
institution. These guidelines require all banks to maintain a minimum
leverage capital ratio of 4.00% for adequately capitalized banks and 5.00%
for well-capitalized banks. 1st Source's leverage capital ratio was 9.95%
at March 31, 1999.
The Federal Reserve Board has established risk-based capital
guidelines for U.S. banking organizations. The guidelines established a
conceptual framework calling for risk weights to be assigned to on and
off-balance sheet items in arriving at risk-adjusted total assets, with
the resulting ratio compared to a minimum standard to determine whether a
bank has adequate capital. The minimum standard risk-based capital ratios
effective in 1999 are 4.00% for adequately capitalized banks and 6.00% for
well-capitalized banks for Tier 1 risk-based capital and 8.00% and 10.00%,
respectively, for total risk-based capital. 1st Source's Tier 1 risk-based
capital ratio on March 31, 1999 was 12.18% and the total risk-based
capital ratio was 13.46%.
LIQUIDITY AND INTEREST RATE SENSITIVITY
Asset and liability management includes the management of interest
rate sensitivity and the maintenance of an adequate liquidity position.
The purpose of liquidity management is to match the sources and uses of
funds to anticipated customers' deposits and withdrawals, to anticipate
borrowing requirements and to provide for the cash flow needs of 1st
Source. The purpose of interest rate sensitivity management is to
stabilize net interest income during periods of changing interest rates.
Close attention is given to various interest sensitivity gaps and
interest spreads. Maturities of rate sensitive assets are carefully
maintained relative to the maturities of rate sensitive liabilities and
interest rate forecasts. At March 31, 1999, the consolidated statement of
financial condition was rate sensitive by $49,741,000 more liabilities than
assets scheduled to reprice within one year or 96.38%. Management adjusts
the composition of its assets and liabilities to manage the interest rate
sensitivity gap based upon its expectations of interest rate fluctuations.
1st Source has entered into two off-balance sheet interest rate swaps
as part of its interest rate risk management strategy. The swaps are
being used to hedge against the Company's prime floating rate loans. The
notional amount of the first swap as of March 31, 1999, is $9.1 million.
It has a maturity date of January, 2002, and has a current fair value of
$21,223. The second swap has a notional amount of $9.1 million as of
March 31, 1999. It has a maturity date of March, 2001, and has a current
fair value of $25,532.
The Company pays a variable interest rate (one-month LIBOR) on each
swap and receives a fixed rate. The interest rate swaps are the most
efficient means of protecting the bank's net interest rate margin in a
declining interest rate environment. Conversely, if interest rates
increase, the increased contribution to net interest income from on-balance
sheet assets will substantially offset any negative impact on net
interest income from these swap transactions.
YEAR 2000
The Y2K issue is the result of potential problems with computer systems
or any equipment with computer chips that store the year portion of the
date as just two digits (e.g., 98 for 1998). Systems using this two-digit
approach may not be able to determine whether "00" represents the Year 2000
or 1900. The problem, if not corrected, may make those systems fail
altogether or, even worse, allow them to generate incorrect calculations
causing a disruption of normal operations.
In 1997, a comprehensive project plan to address the Y2K issue as it
relates to 1st Source's operations was developed, approved by the Board of
Directors and implemented. The scope of the plan has five phases comprising
Awareness, Assessment, Renovation, Validation and Implementation as defined
by federal banking regulatory agencies. Two project teams were assigned.
The first consisted of key members of the technology staff, representatives
of functional business units and senior management. The second primarily
consisted of lenders and credit personnel. The first team assessed our
systems and equipment and vendors to ascertain their readiness and to develop
the overall plan to bring our systems into compliance. The second team
assessed the readiness of our customers and determined what risk, if any, our
key customers pose to the bank with regards to their Y2K readiness.
Additionally, the duties of the Senior Vice President of Operations were
realigned to allow him to serve as the Year 2000 Project Manager.
The scope of the project also includes other operational and environmental
systems since they may be impacted if embedded computer chips control the
functionality of those systems. From the assessment, 1st Source has
identified and prioritized those systems deemed to be mission critical or
those that have a significant impact on normal operations.
1st Source relies on third-party vendors and service providers for much of
its data processing capabilities and to maintain its computer systems.
Formal communications with these providers and other external counterparties
were initiated in 1997 to assess the Y2K readiness of their products and
services. Their progress in meeting their targeted schedules is being
monitored continually for any indication that they may not be able to address
the problems in time. Thus far, responses indicate that all of the
significant providers currently have compliant versions available or are well
into the renovation and testing phases. However, 1st Source can give no
guarantee that the systems of these service providers and vendors on which
1st Source's systems rely will be timely renovated.
Additionally, 1st Source has implemented a plan to manage the potential
risk posed by the impact of the Y2K issue on its major borrowing customers.
Formal communications have been initiated from normal loan operations, and
the assessment was substantially complete on December 31, 1998. Loan losses
attributed to the Y2K issue are not anticipated to be material to 1st Source.
However, there can be no guarantee that any loss incurred will be immaterial.
1st Source's total cost for the Y2K project is estimated to be between
$2,000,000 and $2,200,000. The total amount expended on the project through
March 31, 1999, was $1,110,000 of which approximately $1,040,000 related to
the cost to repair or replace software. Approximately $59,000 was related
to the cost of replacing equipment and approximately $11,000 was related to
miscellaneous items such as training for employees and communications with
customers.
Funds have been provided from our normal operating budget and costs are
expensed as they are incurred. The total cost to 1st Source of these
Year 2000 readiness activities has not been, and is not anticipated to be,
material to its financial position or results of operations in any given
year.
The project team feels that 1st Source's Y2K readiness project is on
schedule. The following table provides a summary of the current status of
the five phases involved and a projected timetable for completion.
TARGET DATES FOR MISSION CRITICAL SYSTEMS
PROJECT PHASE % COMPLETED ESTIMATED COMPLETION
Awareness 100% --
Assessment 100% --
Renovation 100% --
Validation 100% --
Implementation 94% June 30, 1999
Much of the work done within this project is an acceleration of work that
would have been done in the normal course of business.
The costs and timetable in which 1st Source plans to complete the
Year 2000 readiness activities are based on management's best estimates,
which were derived using numerous assumptions of future events including the
continued availability of certain resources, third-party plans and other
factors. 1st Source can make no guarantee that these estimates will be
achieved and actual results could differ from such plans.
Based upon current information related to the progress of its major
vendors and service providers, management has determined that the Y2K issue
will not pose significant operational problems for its computer systems.
This determination is based on the ability of those vendors and service
providers to renovate, in a timely manner, the products and services on
which 1st Source's systems rely. However, 1st Source can give no guarantee
that the systems of these suppliers will be renovated in a timely manner.
Realizing that some disruption may occur despite its best efforts, 1st
Source is in the process of developing contingency plans for each critical
system in the event that one or more of those systems fail. While this is
an ongoing process, 1st Source expects to have the plans substantially
documented by June 30, 1999.
1st Source cautions that this Y2K disclosure includes certain
"forward-looking statements." The reader should refer to the "forward-looking
statements" disclosure at the beginning of Part I, Item 2 for further
discussion.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.
None
ITEM 2. Changes in Securities.
None
ITEM 3. Defaults Upon Senior Securities.
None
ITEM 4. Submission of Matters to a Vote of Security Holders.
None
ITEM 5. Other Information.
None
ITEM 6. Exhibits and Reports on Form 8-K.
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
1st Source Corporation
DATE 5/13/99 /s/ Christopher J. Murphy III
(Signature)
Christopher J. Murphy III
Chairman of the Board, President and CEO
DATE 5/13/99 /s/ Larry E. Lentych
(Signature)
Larry E. Lentych
Treasurer and Chief Financial Officer
<TABLE> <S> <C>
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<PERIOD-END> MAR-31-1999
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<INT-BEARING-DEPOSITS> 2935
<FED-FUNDS-SOLD> 0
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<INVESTMENTS-HELD-FOR-SALE> 416468
<INVESTMENTS-CARRYING> 91519
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<TOTAL-ASSETS> 2670319
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0
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<ALLOWANCE-OPEN> 40929
<CHARGE-OFFS> 269
<RECOVERIES> 127
<ALLOWANCE-CLOSE> 42080
<ALLOWANCE-DOMESTIC> 20231
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 21849
</TABLE>
